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Jun 30, 2024
Advantage Solutions Q2 2024 Earnings Report
Advantage Solutions' second quarter performance improved, marked by strategic transformation and divestiture of non-core assets.
Key Takeaways
Advantage Solutions reported revenues of $873 million for Q2 2024, a decrease compared to $964 million in the previous year. The net loss from continuing operations was $113 million. Adjusted EBITDA was $90 million, consistent with the prior year, with margins at 10.3%. The company made progress on its strategic transformation by completing divestitures of non-core assets to simplify its business and pay down debt.
Revenues decreased by 9% to $873 million, but increased by 1% when excluding the impact of $101 million related to the deconsolidation of its European joint venture.
Adjusted EBITDA was $90 million, in line with the prior year, and margins were 10.3%.
The company focused on disciplined capital allocation, with debt and share repurchases of $27 million and $9 million, respectively.
Management reaffirmed its full-year guidance to deliver growth during a year of significant investment.
Advantage Solutions
Advantage Solutions
Forward Guidance
Management expects 2024 revenues and Adjusted EBITDA to grow low single digits on a continuing operations basis.
Positive Outlook
- Revenues are expected to grow low single digits.
- Adjusted EBITDA is expected to grow low single digits.
- Actions to simplify the business are substantially complete.
- Three-year IT transformation capital expenditures are now expected to be $140 million to $150 million, down from the initial range of $160 million to $170 million.
- The expectation for 2024 is for Adjusted Unlevered Free Cash Flow conversion to be at the high end of the 55% to 65% range.
Challenges Ahead
- Management expects minimal excess cash in 2024.
- The company will continue to invest and transform the business.
- Cash will be used to pay down debt.
- Wage inflation
- Soft market conditions